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Implications of your credit score: A detailed analysis

clixblog December 24, 2019

When it comes to planning your financial well-being, it goes without saying that your credit score plays a vital role in deciding how things play out. After all, this score is the most significant indicator of one’s credit history and reliability. Given the fact that 67% of Indians are more than ready to take loans, it must be said that having a high credit score is of paramount importance in modern times. Similarly, the impact of a poor credit score can be highly detrimental, throwing a sizeable wrench into a person’s financial plans.

 A credit score ranges between 300 to 900 – a number that is meaningless without proper knowledge. To attain a greater understanding of your credit report, here’s a look at the implications & effect that both a good & poor credit score can have on your business.

Good Credit Score

A score that’s above 700 is generally considered to be a desirable credit score by many. Having a score in this range allows borrowers to enjoy the following benefits.

  • Swift approvals:

 A good credit score is indicative of the fact that – among other things – a person is financially responsible. Banks and financial institutions that check out an aspiring borrower’s credit score will attain a sense of security, approving credit requests at the drop of a hat for these individuals.

  • Personalised offers:

As mentioned above, the inherent trust that authorities place on a good credit score is quite valuable for borrowers. Certain institutes actually form tailor-made loan offers with lucrative benefits for these individuals. This is the power of a good credit score – the inherent trust associated with this number means that your credit requirements will be met with the greatest of ease!

  • More negotiation power:

A high credit score enables borrowers to discuss the terms of their loan application with greater freedom. This flexibility helps people choose a line of credit that best adheres to their needs and interests.

  • Freedom to purchase assets: 

Everyone wants to buy a car, a house, and other such assets further down the line. Securing funding is imperative in these cases, and a high credit score will help individuals achieve the same with little to no issues.

Bad Credit Score

A credit score that’s below 550 is a serious cause of concern, which needs to be addressed and improved as soon as possible. Failing to do so can lead to major issues, some of which are mentioned below.

  • Frequent rejections for availing credit: 

A low credit score signifies a lack of trust in a borrower’s repayment capacity. Without this assurance, it’s highly probable that the vast majority of your loan applications will be rejected right off the bat.

  • Loans with undesirable conditions: 

If your loan application does get approved, don’t think that you’re out of the deep waters just yet. If anything, a lack of financial viability means that your loans are bound to come with a bunch of undesirable terms and conditions – such as high-interest rates and less-than-optimal term periods, to name a few.

  • Lack of negotiating power: 

While negotiating for better loan offers might be a possibility, a bad credit score will severely hamper your capacity to ask for better deals. In fact, chances are that your requests might not even be entertained in the first place.

  • Problems in acquiring assets:

A bad credit score can place a massive dent in your asset purchasing power. The lack of approvals when it comes to getting car loans or home loans will undoubtedly be a huge problem further down the line.

With your credit score playing a massive role in deciding your credit-availing capacity, it’s essential to realize the importance of this number and the implications of having either a good or bad score – something that we delve into with this article. You can check your credit score here: https://www.clix.capital/credit-score/ If you wish for a more personalized and detailed analysis of your credit score, just reach out to usat hello@clix.capital 

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